How Your Brokerage Can Thrive During a Recession
Retention and Optimization – the key to survival during an economic slowdown.
A downturn in economic activity means a shift in focus for brokerages in Canada and the U.S. While forecasters call for a moderate recession in 2023 due to the war in Ukraine and an increase in inflation, brokerages must adopt a strategy to maintain or boost their revenue during economic uncertainty.
3 Strategies to Adopt During a Recession
There are three strategies that a brokerage can include in their business operations to survive and potentially thrive in a recession. These strategies include retention, optimizing their book of business, and optimizing their business operations.
As brokerages’ operations are primarily run by their existing book of business, retaining clients and maximizing revenue out of their current book are critical steps to maintain growth.
How Technology Eases the Transition Through a Slowdown
Technology is vital for a brokerage to gain efficiencies and do more with less. To retain clients, for example, a brokerage can use data, intelligence, and analytics to identify which clients are most at risk of shopping around and leaving for the competition.
To optimize a brokerage’s revenue, data and intelligence tools can also be used to ensure a brokerage is not leaving money on the table. Trufla’s Broker X-Ray tool identifies which clients are at risk because they are overpaying and which customers’ premiums have gone down and want to increase their coverage limits. Broker X-Ray helps ensure your brokerage is not leaving money on the table while your customers save money – it’s a win-win scenario.
What Tools Can Brokerages use to Automate During a Recession
Are your employees using their time efficiently to align with your brokerage’s goals? Our self-service tool, CP360, allows your clients to obtain vital information on the go, like pink cards and automated requests. This self-service communication tool can free your staff to do fewer administrative tasks and focus more on customer service.
“CP360 is like a Constant Contact or Mailchimp on steroids; you can embed live data elements into CP360 from a client’s policy to highly personalise and customise each message to the client,” says Sherif Gemayel, CEO of Trufla. Gemayel added that you could also use push notifications to communicate with clients without them having to go to their email or the news to check for relevant insurance information.
Companies Spending Less on Marketing Could Benefit Brokerages
As many businesses reduce spending on marketing during a recession, the costs per click will likely decrease due to less competition for ad space and keywords on Google Ads, which could lower your brokerage’s costs for acquiring new clients.
However, this scenario depends on a few factors, including the current economic climate and the type of insurance your brokerage sells. For example, if the recession is severe, fewer people will search for products and services online, and thus your click-through rate will likely decrease.
Retain Clients Using Trufla’s Technology
While a decline in economic activity is beyond your control as a business owner, you can protect your business in several ways, including retaining existing clients and improving your interaction with your customers. In addition, Trufla’s tools help automate your brokerage’s processes and provide data and analytic tools to identify clients on their way to your competitors. In a recession, these clients are essential for the survival of your brokerage and adopting new strategies is vital to maintaining and growing your business.